An undesirable trading situation (UTS) is a situation outside the normal operation of the electricity market that threatens, or may threaten, confidence in, or the integrity of, the wholesale market and which cannot be addressed by other provisions of the Electricity Authority’s code. The authority confirmed on Tuesday that there was a UTS between December 3 and December 27 last year. It will consult early next year on proposals to correct the situation. ”What we found in the wholesale market during the UTS period were far from normal outcomes given the conditions at the time,” said Electricity Authority chief executive James Stevenson-Wallace.
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What are Meridian and Contact alleged to have done? Seven electricity retailers including Flick Energy and ElectricKiwi complained Meridian and Contact spilled water from their South Island dams late last year that they should have used to generate cheap power. They said the wastage, during a time of heavy rain, happened over a period of more than a month. The retailers believe Meridian and Contact profited from the wastage overall, as it meant they got a higher price for the electricity that they did sell to other retailers through the wholesale market. They allege the wastage also resulted in 6000 tonnes of unnecessary of carbon emissions, as coal and gas was burnt to produce power the hydro schemes could have supplied.